The Goods and Services Tax (GST) is a multi-stage tax that applies to most goods and services sold or provided in Canada at a rate of five per cent:
- The GST on imports is initially levied on the freight on board (FOB) price plus applicable Canadian customs duties.
- The GST on domestically produced goods is initially imposed at the manufacturer’s level.
- GST is levied at the retail level on the provincial sales tax (PST) paid value, i.e. the value including the PST.
A limited range of goods and services have no GST applied:
- sales of basic groceries and prescription drugs
- services including sales of used housing, financial services, some health, legal, and educational services, services by governments and other specified public bodies, and activities by charities and non-profit organisations.
Excise tax of 10 per cent of the duty-paid value is levied in addition to the GST on specific goods and services. Goods subject to excise include:
- playing cards
- cigarettes and tobacco
- beer and other alcoholic beverages
- aviation gasoline
- diesel fuel
Provincial retail sales taxes (PST) ranging from six to 10 per cent, are levied in all provinces except Alberta, the Northwest Territories and the Yukon.
The harmonised sales tax (HST) for imported goods is applicable in the provinces of New Brunswick, Nova Scotia and Newfoundland instead of the GST and PST. The HST is at a rate of 15 per cent, comprising a seven per cent federal and an eight per cent provincial tax.
More detailed information on Canadian taxation requirements is available from Canada Customs and Revenue Agency.